PHILIPPINE BUSINESS NEWS, MANILA — The Philippine economy expanded by 6.4% in the second quarter of 2014, officials revealed on Thursday, restoring hopes that the growth target of 6.5 to 7.5% for the full year, could still be achieved.
The government statistics agency reported the second quarter figure improved on the 5.6% achieved in the first quarter, driven mainly by industry growth of 7.8% and services growth of 6.0%. Growth in the first quarter had been restricted by the Bohol earthquake and Typhoon Haiyan at the end of 2013, that severely damaged the economy of the regions effected.
“This higher growth rate, coming from a high base a year ago shows that the economy is back on the higher trajectory of growth,” said Economic Planning Secretary Arsenio Balisacan. “We remain as one of the bright spots in the region, the second fastest growing economy among major Asian countries for the period, tied with Malaysia’s performance, he said. “Overall we see that the country still has a strong likelihood of achieving the full year growth target of 6.5 to 7.5 percent.”
Balisacan reported that the agriculture sector had recovered from its 0.2% decrease in the second quarter of 2013, posting 3.6% growth for the same period this year. The demand for livestock and poultry is expected to grow further in the run up to the Christmas holiday season.
However, industry’s 7.8 percent growth was dampened by the weak performance of the public construction sector, resulting from lower spending on infrastructure and capital outlays, he said.
Balisacan told reporters that state spending would increase with urgency. “The identified administrative bottlenecks that contributed to the underperformance of the government sector are being addressed” he said. He stressed that the government had now dealt with delays in approving rehabilitation projects for communities affected by Super Typhoon Haiyan.
Independent economists have given cautiously optimistic assessments for the Philippines. “It’s a decent rebound but there are still challenges ahead,” said the chief market strategist of BDO Unibank, Johnathan Ravelas.
ANZ Research said it was forecasting 6.9-percent growth for the whole of 2014, but that this was dependent on President Aquino being able to push ahead with increased spending on infrastructure.